NanciL wrote:
I can only say that yes you made a mistake.
He who cannot afford to pay cash should not finance a travel trailer or anything else accept a house or vehicle.
You'll never get out from under
Tent until you can afford to pay cash, and you'll enjoy that trailer much more
Jack L
Hello Jack, your exceptions to the “no financing” rule are in connection with the purchase of a house or vehicle. What makes those two exceptions acceptable? Oddly, a travel trailer is actually both of those things if you think about it. If the TT were somebody’s primary residence would you then think that financing it is acceptable? Would you object to someone taking out student loans?
My point is this, financing a purchase can make sense for people in many unique circumstances. It really is up to (and the responsibility of) the individual to understand what is advisable, and if they cannot make that determination then they should consult with a financial advisor for guidance. Credit is a tool. Credit isn’t inherently evil. Rather the propensity to abuse credit is the root of the problem for many.
Credit has many legitimate and valuable uses such as limiting the need to tie up liquidity. Furthermore, if your assets outnumber your debt load, then debt can be a powerful tool. For me, my personal goal is to never exceed a 25% debt/asset ratio....a business can go much higher. That way you can rest assured that you won't lose your shirt if your financial circumstances change.
